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Please help me with the table, I don't know why I failed it. Also, question 6, the question is the amount by which the advertising
Please help me with the table, I don't know why I failed it. Also, question 6, the question is the amount by which the advertising can be increased by is?
Note: the table at the top has the original data, for fixed and variable cost, also selling price. This is the whole question
Klein Company distributes a high-quality bird feeder that sells for $45 per unit. Variable costs are $18 per unit, and fixed costs total $180,000 annually. 5-a. Refer to the original data. Assume that the company sold 28,500 units last year. The sales manager is convinced that a 20% reduction in the selling price, combined with a $64,000 increase in advertising expenditures, would cause annual sales in units to increase by 30%. Prepare two contribution format income statements, one showing the results of last year's operations and one showing what the results of operations would be if these changes were made. (Round "Per Unit" answers to 2 decimal places.) KLEIN COMPANY Contribution Margin Income Statement Last Year Proposed 28,500 units 37,050 units Total Per Unit Total Per Unit Sales $ 900,000 $ 31.58 $ 935,883 $ 25.26 Variable expenses 630,000 22.11 819,176 22.11 Contribution margin 270,000 9.47 116,707 3.15 Fixed expenses 180,000 180,000 X Net operating income $ 90,000 $ (63,293) *Red text indicates no response was expected in a cell or a formula-based calculation is incorrect; no points deducted. 5-b. Would you recommend that the company do as the sales manager suggests? Yes No 6. Refer to the original data. Assume again that the company sold 28,500 units last year. The president feels that it would be unwise to change the selling price. Instead, he wants to increase the sales commission by $2 per unit. He thinks that this move, combined with some increase in advertising, would increase annual unit sales by 40%. By how much could advertising be increased with profits remaining unchanged? Do not prepare an income statement; use the incremental analysis approachStep by Step Solution
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